1 in 10 Employers Likely Will Stop GLP-1 Coverage in 2027

The soaring cost of GLP-1 medications are causing employers to consider new ways of controlling the expense — one of which is simply no longer covering them.

Of those employers covering GLP-1s for weight management, only 72% said they were likely to continue coverage for the drugs in 2027, while 10% said they likely would not, according to a new survey of 105 employers from the Business Group on Health (BGH).

Currently, according to BGH, most employers cover GLP-1s for diabetes, and 67% of surveyed employers currently cover GLP-1s for weight management, with many employers relying on various strategies to ensure the appropriate use of GLP-1s for weight management. And companies that do not cover GLP-1s for weight management today are unlikely to add coverage in the future. 

It’s not all that surprising that some employers are rethinking coverage, said Sara Izadi, chief clinical officer at New York City-based health technology company Judi Health.

“Employers continue to face mounting pressure to manage rising pharmacy and healthcare costs and, in many cases, have yet to see clear ROI from GLP-1 utilization in their own employee population,” she said.

Tool: GLP-1 Calculator

In fact, the BGH data found, while more than half of employers that cover GLP-1s for weight management expect the expensive medications to yield significant clinical benefits, few have yet seen evidence — such as a reduction in obesity rates and fewer employees needing bariatric surgery — within their aggregated claims.

Soaring Healthcare Costs

Costs undoubtedly also play a major role in employers’ changing plans.

“Against the backdrop of anticipated double-digit healthcare cost increases, fueled to a large degree by GLP-1s and overall prescription drug costs, companies cannot ignore the reality that GLP-1s have significant implications for healthcare budgets — and overall affordability,” said Ellen Kelsay, president and CEO of Business Group on Health. 

Meanwhile, the introduction of GLP-1 oral drugs are also expected to have an impact on employers’ coverage and costs. The oral version of Wegovy, the GLP-1 receptor agonist used for chronic weight management, was approved by the Food and Drug Administration late last year, while Foundayo, a GLP-1 receptor agonist pill from Eli Lilly, was approved in April. 

Article: GLP-1 Pills Are Here: What Does It Mean for Employers?

The biggest impact for workplaces will likely be increased utilization of the therapies. GLP-1 injectable medications were already growing significantly in employee interest and use. Now GLP-1 pills will likely expand the population of people who are both eligible and willing to pursue treatment beyond today’s injectable users, said Nick Conway, president of Rx solutions at NFP, a New York City-based global benefits consultant and insurance brokerage firm.

“For those who weren’t comfortable with weekly injections, a once-daily pill is much easier to use and understand,” he said. “These medications are also easier to manufacture and distribute, which will likely lead to an increase in access and supply.”

Fully 87% of employers anticipate that the availability of an oral GLP-1 medication will result in higher demand for the drugs overall, according to the Business Group on Health —  which may impact prices — and only 9% of employers anticipate a decrease in price. 

Rethinking Coverage

Although several employers are planning to stop coverage altogether in the coming year, rethinking GLP coverage does not necessarily mean eliminating access, Izadi said.

“Employers are increasingly aligning eligibility with clinical criteria, requiring participation in lifestyle programs to promote appropriate utilization, and exploring alternative funding models,” she said. “The goal is not just medication coverage — it’s ensuring patients receive the right therapy and the support needed to achieve sustainable, long-term outcomes.”

Other strategies employers are embracing include validating clinical eligibility via objective biometric data, requiring participation in a weight management program to receive coverage, limiting prescribing to specific providers, and excluding certain medications from the formulary, according to the BGH.

Overall, employers are continuing to evolve their approach to GLP-1 coverage, Izadi said.

“We will continue to see greater emphasis on alternative funding models that leverage direct-to-employer and self-pay pathways. Longer term, the biggest wildcard, she said, is “as manufacturers lower net prices and GLP-1 competition increases, coverage can stabilize and even expand. Employers will move towards a far more managed, outcomes-focused approach.”